Public debt trajectory worrisome – Mokhurutse
Lesedi Mkhutshwa | Monday February 23, 2026 06:00
As at December 2025, total public debt, including sovereign guarantees, amounted to P90.03 billion, or 33.02% of the Gross Domestic Product (GDP). By the end of the 2026–2027 financial year, the government expects public debt to reach 44.6% of GDP, above the 40 percent of GDP fiscal limit.
Speaking at the Access Bank budget review, Mokhurutse said that whilst the debt levels are reasonable in absolute terms, the trajectory is very worrisome.
'I think that by March 2024, public debt was sitting at about 22.7% of GDP, and we are seeing that by March 2027, it will be at 44.7%. “That's a pretty big 20-something percentage point jump in the space of three years, which is very unsustainable in terms of debt trajectory,' he said.
During his budget speech presentation, Finance Minister Ndaba Gaolathe said that whilst the projected increase in debt levels may generate short-term credibility concerns, these were outweighed by the significantly greater economic risks that would arise from the sharp fiscal consolidation needed to stay within the existing limits.
“In this context, a well-defined increase in the statutory debt limit, anchored to a credible consolidation plan and supported by structural reforms, will be necessary to balance fiscal sustainability with economic growth,” he said. “This approach would create sufficient space for a gradual and orderly fiscal adjustment, while preserving the flexibility required to respond effectively to adverse shocks.”
Credit ratings agencies that Botswana subscribes to, such as Moody’s and S&P, are carefully watching the country’s debt trajectory and overall fiscal stability. Last year, both agencies downgraded the country’s sovereign credit ratings, a move that implies higher borrowing costs for the government.
Meanwhile, Mokhurutse hailed developments around the Botswana Mercantile Exchange (BMX), the long-awaited strategic market-driven pricing mechanism for commodities such as sorghum and beef.
The BMX will introduce an organised, market-driven pricing mechanism for commodities such as sorghum and beef, aligning domestic prices with international benchmarks, which will enable farmers and other producers to derive more value from their products.
“Generally, with the commodities platform, the implication is that farmers will have access to a wider market, including export markets that were previously inaccessible. “Another significant advantage of this exchange is that pricing becomes much more transparent because the bidding processes are regulated and formalised, eliminating the middleman,” he said.
According to the budget speech, the BMX is expected to reduce income volatility for local producers and improve price discovery. Gaolathe said beyond agriculture, the BMX will contribute to reducing Botswana’s over-reliance on diamonds by creating new value chains, positioning the country as a regional trading hub, and strengthening integration into global trade networks.